Eni IPO: What do we know about this biggest to be Italian listing?

Highlights

  • Italian oil and gas giant, Eni, is reportedly planning to float its retail and renewable energy unit on the market.
  • The group will have a tentative name Eni R&R and will likely launch its IPO in 2022.
  • The Eni R&R IPO is expected to be the biggest Italian IPO in the last 20 years.

Italian oil and gas major Eni SpA is planning to publicly list its retail and renewables business unit, according to a Bloomberg report.

The group will tentatively be known as Eni R&R. The report comes after the company had first revealed its plans for merging and subsequently floating its retail and renewable energy divisions on the market in May, earlier this year.

The possible IPO is expected to be one of the biggest moves in the energy sector in 2022 and is also expected to be one of the biggest Italian IPOs in the last 20 years.

Eni SpA’s IPO details

The company is looking to have a market valuation of about EUR 15 billion (US$ 17.44 billion) and is planning to launch its IPO in the next year to make the most out of its low carbon operations valuation.

The oil major also plans to retain a majority holding in the merged business following its public listing on Italy’s stock exchange based in Milan, the Borsa Italiana.

Eni R&R’s merged entity

The merged business is expected to see its earnings before interest, taxes, depreciation, and amortisation (EBITDA) increase by 2x to EUR 1.2 billion in 2025, from an EBITDA of EUR 600 million this year.

The parent company, Eni, stated that the newly merged business is also on track to increase its renewable energy capacity to over 6 GW by 2025 and to over 15 GW by 2030.

Eni R&R’s IPO and merged business details

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Image description: Eni R&R’s IPO and merged business details

Eni R&R is Italy’s second-largest operator of EV charging points, and the newly formed entity plans to increase its charging stations from 5,000 stations at present to over 30,000 by 2030.

Eni said the merging of its green energy production unit with its retail supply operations helping in achieving synergies across cost and also support in stabilising cash flow due to the hedging seen between energy generation and retail sales.

Eni R&R will be established as an independent unit from its parent company and have its own balance sheet and investment-grade credit rating, according to Eni.

Bottom Line

Eni R&R’s IPO also comes amidst a shift in the energy sector as more and more energy giants face pressure to become low carbon.

The parent company’s emissions outlook has also been accelerated with a new target of achieving net-zero absolute emissions and intensity by 2050, compared to its previous target of reducing emissions by 80 per cent instead.

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